* European shares dip, Wall St set to open lower
* French bonds underperform after Le Pen campaign launch
* Oil up on concern over extension of Iran sanctions
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Nigel Stephenson
LONDON, Feb 6 (Reuters) - The dollar edged higher on Monday but European stocks fell as investors sought clarity in the face of a host of economic and political uncertainties.
Wall Street looked set to open lower at the beginning of a heavy week of corporate earnings in Europe and the United States.
In the currency market, the question was how Friday’s U.S. labour market data will affect the pace of Federal Reserve interest rate rises. Far more jobs were added last month than expected, though hourly wages barely budged.
Oil prices rose after new U.S. sanctions were imposed on Iran on Friday over its missile programme.
French government bonds meanwhile underperformed German benchmarks, with the gap in yields its widest in four years after French far-right party leader Marine Le Pen launched her bid for the presidency with a vow to fight deregulated globalisation and to take France out of the euro.
The single currency fell more than half a percent on risks linked with the French election to be held in April and May.
But there was no overarching theme to Monday’s market moves, highlighting how correlations between financial market assets have broken down in recent months as investors sense the era of ultra-loose monetary policy may be winding up.
“There is a sense of general uncertainty and I‘m not sure if you can pin-point it to anything in particular,” said Orlando Green, European fixed income strategist at Credit Agricole.
“You could say markets are a bit edgy about the political scene in Europe, the political scene in the U.S. and there’s a bit of uncertainty about when the Fed will hike rates next.”
The pan-European STOXX 600 index were all but flat, giving up earlier gains, with banking stocks, particularly in Italy, weighing on the index.
Shares in Italy’s UniCredit fell 3.7 percent on the first day of the bank’s $13 billion euro cash call.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.6 percent.
Japan’s Nikkei rose 0.2 percent, with banks rising after U.S. President Donald Trump signed an executive order to scale back regulations in the financial industry that were implemented after the financial crisis nearly a decade ago.
Trump meets Japanese Prime Minister Shinzo Abe on Feb. 10 and 11, with trade and currencies likely to be on the agenda.
China’s CSI 300 stocks index rose 0.3 percent, though investors were cautious after the central bank unexpectedly raised short-term interest rates on Friday.
In debt markets, French 10-year government bond yields rose 2 basis points to 1.1 percent. German equivalents, the euro zone benchmark, fell 4 bps to a two-week low of about 0.38 percent, pushing the gap between the two to its widest in four years.
“Le Pen winning is unlikely, but the situation in France is certainly raising fears among investors,” said DZ Bank rates strategist Christian Lenk. “French bonds will continue to underperform even though a lot is priced into the market.”
The Italian 10-year yield gap over Germany widened to 200 bps, a level not seen since October 2014.
The euro weakened 0.6 percent to $1.0721 while the yen gained 0.4 percent to 112.23 per dollar and sterling dipped 0.1 percent to $1.2450.
The dollar rose 0.2 percent against a basket of major currencies. Data on Friday showed average hourly earnings rose just 0.1 percent, suggesting any inflation pick-up would be slight.
This led some analysts to conclude the Fed would be in no hurry to raise interest rates.
Currency investors are also awaiting details on expected pro-dollar tax and spending initiatives pledged by Trump.
Oil reversed an earlier rise as signs of higher U.S. output offset concern about any extension of new U.S. sanctions imposed on major oil producer Iran.
Brent crude, the international benchmark, rose 9 cents a barrel to $56.92.
For Reuters Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets (Additional reporting by Wayne Cole in Sydney, Dhara Ranasinghe in London; Editing by Catherine Evans)